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Pan American Silver reports earnings per share of US$0.09 for 2Q19

Published by , Assistant Editor
Global Mining Review,

On 7 August, Pan American Silver Corp. reported its unaudited results for the second quarter ended 30 June 2019 (2Q19). Pan American's unaudited condensed interim consolidated financial statements and notes (financial statements), as well as Pan American's Management's Discussion and Analysis (MD&A) for the three and six months ended 30 June 2019, are available on Pan American's website at and on SEDAR at

Pan American's 2Q19 results include the performance of the mines acquired from  Tahoe Resources Inc. (Tahoe), following the completion of that transaction on 22 February 2019 (the Completion Date).

The Bell Creek and Timmins mines (together, Timmins) acquired from Tahoe remain classified as assets held for sale and discontinued operations, and thus are not included in Pan American's revenue or mine operating earnings for 2Q19.

"We delivered strong operating performance in 2Q19, resulting in cash flow from operations of US$83.5 million," said Michael Steinmann, President and CEO.

"The integration of the Tahoe assets is progressing well, and the associated transaction costs are now substantially behind us. Combined with the recent strengthening in precious metal prices and an outlook for lower costs, we should see operating margins improve over the remainder of the year."

Consolidated 2Q19 highlights

  • Net income of US$18.5 million, equivalent to US$0.09 basic earnings per share.
  • Adjusted income of US$9.0 million, equivalent to US$0.04 basic adjusted income per share.
  • Revenue of US$282.9 million (excluding US$57.5 million of revenue from the Timmins mines).
  • Net cash generated from operations of US$83.5 million.
  • Silver production of 6.5 million oz and gold production of 154 600 oz.
  • Zinc, lead and copper production of 17 400 t, 6800 t, and 2100 t, respectively.
  • Silver Segment Cash Costs and All-in Sustaining Costs (AISC) were US$6.67 and US$10.67 per silver ounce sold, respectively, and relate to the company's operations other than the Acquired Mines.
  • Gold Segment Cash Costs and AISC were US$700 and US$980 per gold ounce sold, respectively, and relate to the Acquired Mines.
  • Consolidated Cash Costs and AISC were (US$4.19) and US$6.12 per silver ounce sold, respectively, which include by-product credits from the Acquired Mines' gold production.
  • Guidance for 2019 annual Cash Costs and AISC on a consolidated silver basis has been reduced to between (US$3.30)and (US$1.80) per ounce and between US$7.00 and US$9.00 per ounce, respectively.
  • Guidance for 2019 annual consolidated silver and gold production has been slightly reduced to between 25.3 and 26.3 million oz and between 550 000 – 600 000 oz, respectively, primarily due to postponement of commercial production from the COSE and Joaquin projects by about three months. The revision is not expected to have a significant adverse impact on 2019 financial results.
  • Guidance for project capital expenditures has been slightly increased to US$45 million, primarily as a result of the delay in development of the COSE and Joaquin projects.
  • At 30 June 2019, the company had a cash and short-term investment balance of US$138.8 million and working capital of US$793.1 million. Total debt was US$378.8 million (including US$43.8 million of lease liabilities).
  • Drilling at the La Colorada mine has further defined the skarn mineralisation, indicating a high concentration of base metal and silver mineralisation over large widths, as reported in Pan American's news release dated 1 August 2019.
  • The Board of Directors has approved a cash dividend of US$0.035 per common share, or approximately US$7.3 million in aggregate cash dividends, payable on or about 30 August 2019, to holders of record of Pan American's common shares as of the close on 19 August 2019. Pan American's dividends are designated as eligible dividends for the purposes of the Income Tax Act (Canada). As is standard practice, the amounts and specific distribution dates of any future dividends will be evaluated and determined by the Board of Directors on an ongoing basis.

Cash Costs, AISC, adjusted earnings, basic adjusted earnings per share, working capital and total debt are not generally accepted accounting principle (non-GAAP) financial measures. Please refer to the "Alternative Performance (non-GAAP) Measures" section of this news release for further information on these measures.

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